Banco de Portugal Invests in Real Estate

7 December 2017

The Portuguese central bank’s pension fund bought real estate for rehabilitation in Chiado. One of them is the Palace of Fine Arts, sold for 18 million euros.

Over a year and a half ago, the Palácio das Belas Artes in Chiado was sold for 18 million euros, according to the real estate consultancy JLL. It was one of the most significant transactions of 2015. Who bought it? At the time, the investor was identified, but the Jornal Econômico is now revealing the buyer: Banco de Portugal’s Pension Fund – Defined Benefit.

This is not the only transaction of its kind completed by the bank which recently opined that there are no signs of a real estate bubble in Portugal. The Palácio das Belas Artes, also known as the Iglésias Palace, has a total area of more than 2,500 square meters, three floors, mezzanine, attics, interior gardens, terraces and a patio, as indicated on the building certificate. It is one of the buildings that has the most potential in that area of Lisbon, but other similar transactions in the area.

The Banco de Portugal pension fund also owns a building on Ivens Street (also in Chiado) and has obtained a permit from the city council for expansion works, already underway. The project is destined for retail and housing.

According to the newspaper, there is nothing irregular about these operations, since this pension fund acts like any other similar vehicle. In fact, most of the investments are in lower-risk financial instruments, especially bonds. At the end of 2016, the pension fund’s real estate assets accounted for only 8.1% of the total assets under management, Econômico reported.

Original Story: Economia Online – Cristina Oliveira da Silva

Translation: Richard Turner